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Furla's magic moment
A 54-year-old chief executive of a family-owned Italian brand is not someone you'd imagine swapping Instagram tips with. But here you sit, face to face with Eraldo Poletto inside Furla's newly unveiled Marina Bay Sands flagship store, peering into his iPhone as he tilts it towards you.
"If you think about it, there are some bloggers who have 4 million followers and some heritage luxury brands have a thousand followers. Technically, it doesn't makes sense," he muses aloud, as he scrolls through posts by some of the 100 brands, celebrities and online "influencers" that he keeps track of on the social media channel.
Yet, Mr Poletto sees opportunity in this imbalance: It helps smaller brands level up against bigger, billion-dollar luxury brands. "The good thing is even if we are small, our Instagram network is growing very fast, through our own posts and contributions from people that really are in sync with the brand," he says.
"Social media networks create an environment where the community is stronger than the company, and where customers will increasingly drive innovation. I find sometimes that people from outside look at our brand differently, and that becomes a strong stimulus. It creates energy between what you do and how people see you."
To gain an edge then, brands need to be attuned to the conversation on the street and agile enough to adapt to changing consumer demands, he believes. "Brands used to tell the customer what to buy, but there's now a new paradigm where the consumer wants to talk to you, and the company needs to be ready to listen to your consumer and reply," he says, citing as a case in point Furla's recent collection of graffiti-adorned bags and accessories, created as a response to the growing global popularity of street art. "Social media is really changing the balance and, I think, in a very positive way," he says.
Adapting to this new paradigm requires a certain mindset shift for all retailers, Furla not excepted. "Approximately 60 per cent of consumers will go online to check out a product before they decide to buy something. You see that in the store, people come in and browse and then look into their phones for comparisons so to try to control that, it's insanity."
For Furla, this means frequent software and hardware upgrades to keep with the times. The brand first launched its online store in 2010, but recently refreshed it as a platform that delivers a new concept of "social business". The new look was launched in Europe in August, and in Australia earlier this year. It will be launched in Asia by year-end, says Mr Poletto.
What exactly is social business? "When you go to the site, you can decide if you want to have an experience around what's happening in the Furla world, interact with the brand in a Facebook or Instagram environment, or have a transaction, that is, to buy a bag or accessory," he explains.
Later this year, Furla will also launch a brand new customer relationship management system, which can more precisely track a Furla customer's shopping preferences and spending habits across all its 398 mono-brand global stores in over 100 countries. "A traditional loyalty programme is very narrow in that you are associated with a particular country of the store you made a purchase in, but through this project, you are associated with Furla whether you shopped in our store in Singapore or China, or at an airport, or you came into contact with us through our e-commerce store and digital platforms."
This, Mr Poletto says, ensures that the customer is acknowledged "properly", wherever she is. Because to him, the oft-parlayed tension between online and physical channels of retail is unnecessarily wrought.
"I believe in freedom. I cannot control what the customer does because I would be very upset if my brand was to control how I behave. That is my own business," he explains. "Likewise, we need to give our customer the freedom to buy online, to buy in-store, or to buy in whichever country she chooses to. Our job is to be there for her. The key is to have a cross-channel way to track the consumer where she is moving in order to be there to provide a service."
This is why, even as the brand grows its digital footprint, it is not letting up on expanding its global physical retail network either.
Furla opened 111 new stores globally in the last two years and the business achieved a consolidated turnover of 262 million euros in 2014, an increase of 15 per cent from 2013. Besides its Marina Bay Sands flagship store - its seventh in Singapore - other flagship stores have already been planted in Asia-Pacific capitals such as Shanghai, Hong Kong and Sydney. An American flagship was inaugurated along New York's Fifth Avenue in September, and a refresh of their Ginza, Tokyo store will be completed by October, followed by additional stores in London and Rome over the next few months.
"We have 1,400 employees around the world. We have a lot of room to grow to compete with some players that are worth billions of dollars. I think critical mass is very important, so growth is important, we have no choice. The key every day is to be there tomorrow."
And the concerted efforts seem to be paying off so far. The 88-year-old global fashion and accessories brand is going through what Mr Poletto believes is a "magic moment".
"I think overall we are performing very, very well, we are very pleased by the results. We are growing at a very fast speed and the good thing is that every country, every channel is really performing," he says. "Everybody is talking about how difficult everything is (in the retail sector), but it is what it is. And we are really over-performing compared to many other brands, so that is telling us that we are doing the right thing."
Yet, he is quick to throw in a caveat: "But when I say 'magic moment', it doesn't just show up - it's the result of hard work, of trying to do the right thing and being focused on what we are good at."
Nor does this mean the brand intends to coast on its achievements, he adds. "Improving the results over the entire network is key. We look at the performance of every store in our network around the world every day. And how we can expand the product offer, perform better, and open more key stores," he says.
Sounds pretty aggressive, you venture. "My philosophy is to be cautiously aggressive," he counters. "To be aggressive means that you're always to look ahead and not to be concerned of what's happening. Sometimes (this requires) having very strong direction, very strong strategy.
"Yet, we don't open a store just to add one more address to the list. You must not let your ego determine how you do things, it has to be right. We open stores that we know that will make money, when we feel it is the right moment," he adds.
As for determining the site of future stores, Mr Poletto believes in looking at business trends centred around the shopping patterns of the consumer, rather than by location alone.
"There are many Asians shopping in Europe, or we can have the same customer buying in Japan, Hong Kong or Singapore, so it really is more about this global consumer that is moving around than doing things in certain ways in each country; that is a thinking of the past," he says.
Another trait to recognise is that this consumer has changing needs and tastes. He elaborates: "Something that we have to keep in mind is that everything does change. So we can't pretend that the consumer is the same one as a year ago. Even us as a company, we are evolving every six months. I tell my people that we have a new company every six months."
Though seasons may change, and runway trends along with them, Furla's constant is its strong adherence to their Made in Italy ethos - something that helps them stand out from other luxury brands, Mr Poletto believes.
"We are 'made in Italy' not just because of logistics, but because of the way, as a company, we have done things for the last 88 years - with a lot of passion and a very strong network between the designer, the raw material supplier and the maker."
As 100 per cent of the raw materials are produced in Italy and 60 per cent of their retail network is fully owned by the company, it can take just four to five days to bring a product from the drawing board to retail shelves, he says.
Besides their recently launched men's Fall/Winter 2015 collection, Mr Poletto hints at new product categories to be announced "very soon".
The men's collection, in particular, is a project close to his heart as he kickstarted the project in 2011. It was put on a hiatus briefly, before being resurrected earlier this year. This time, the collection carries features overtly designed for the Asian man, such as an expanded colour palette of blue, green and orange-toned leather bags, and versatile designs that can go from day to night use.
"For men, it's usually just black, black and black. In reality there is a very strong evolution, particularly in Asia, of sensibilities around colour and innovation. Asian consumers desire products that have a very strong heritage and are made with attention to detail, and yet they have big appetites to look ahead with a lot of energy," he observes. "In the old continent like Europe, tastes are more conservative."
Such divergent preferences are not a challenge, but an opportunity to galvanise a global following, says Mr Poletto. "Yes, we are proud to be an Italian company, but 20 per cent of our business is in Italy, and 80 per cent is outside Italy. So we have to look at the business on the global scope, and ask what makes a great, democratic design," he says. "Our Metropolis bag is a bestseller from Tokyo to New York and from London to Melbourne. When we do something that is right, it becomes a global phenomenon because everybody buys into it."
As a well-travelled technophile with a strong Italian heritage, Mr Poletto is perhaps a fitting candidate to moderate this balance. The Piedmont native moved to the United States in 1995 to join the Retail Brand Alliance Inc Group, which owns and runs the Brooks Brothers menswear brand. He worked his way up to the group's board and executive team, where he oversaw the brand's global network.
"I became a retailer in the US, it is an amazing training environment. There, it's about speed, it's about velocity, and how to always to be ahead of the game even as things change," says the bachelor with no children, who proudly professes that "my family is my job".
He returned to Italy to join Furla in 2010. "My brain became very American in the business sense, and after 15 years, I felt that I was missing the soul of Europe when this opportunity came up."
While he admits it was not all that easy shifting mindsets away from Furla's old wholesale-oriented model when he first joined the company to its customer-centric retail model today, "the beauty is in the challenge", he says. "You need to make difficult decisions to evolve the company so you don't stay static."
The role also allowed him to combine "the strong American sensibility for business, marketing and data, with the Italian ability to make a product full of passion and history, because we have been around for thousands of years, and the energy of Asia and the younger generation," he says. "The true joy is getting to bring together different pieces of my brain."
To do this, he has cobbled together an international team of technology- and data-driven employees, who "see the ability to be part of the conversation as a great opportunity".
"Our primary allocation team is American, my creative team is very Italian but we also work with designers from Japan, Korea and the UK, so we are ourselves a melting pot. This was what I loved about the US, it drew together the best people around the world and I am trying to do the same here," he states.
Being a family-owned company keeps the brand grounded too. Founder Aldo Furlanetto's three grandsons are involved in the family today, and the first non-family member chief executive officer was only appointed in 2007. "The family has very strong values, they are always looking for the long term, instead of just being opportunistic. It's not only about business, but creating something that is beautiful that makes sense. The family sees the brand as something to protect, because that creates value, and is the real asset."
Mr Poletto continues: "Being 88 years old gives us a great DNA to be around into the future. I never look at things in a nostalgic way or say 'oh, the old good days have gone'.
"In Europe we always hope the game is coming back. The game is tomorrow, it is not yesterday," he adds. "Yesterday will never show up again."
Chief executive officer, Furla SpA
1960 Born in Asti, Italy
1980-1985 Bachelor of Economics, University of Turin
1987-1988 Masters in Textile and Fashion Retail, ISTAO (University of Ancona)
1986-1987 Asst controller corporate, Telecom Italia
1987-1989 Marketing manager textile division, Gruppo Miroglio
1989-1992 Senior manager for direct stores and franchising for Reporter brand, Girombelli
1992-1997 General brand manager for Caractère brand, Gruppo Miroglio
January 1997-2001 Chief merchandising officer, Retail Brand Alliance Inc Group (prior to Brooks Brothers acquisition)
2001-2007 Chief merchandising officer, Retail Brand Alliance
2007-June 2010 President of strategic development and international business, Brooks Brothers. Member of the Board of Retail Brand Alliance; president of Brooks Brothers Int'l; board director of Brooks Brothers Japan, Brooks Brothers UK and Brooks Brothers Europe
June 2010-Nov 2012: Group CEO and board member, Furla
Nov 2012-April 2013 CEO and board member, Alfred Dunhill
Since May 2013 Group CEO and board member, Furla "In Europe we always hope the game is coming back. The game is tomorrow, it is not yesterday. Yesterday will never show up again."